1986 (1) TMI 315 - AT - Central Excise

Summary

Issues Involved:
1. Chargeability of Central Excise duty on Oleum.
2. Classification of Oleum as an intermediate product.
3. Marketability and recognition of Sulphur trioxide.
4. Interpretation of Tariff Item 14-G.

Detailed Analysis:

1. Chargeability of Central Excise duty on Oleum:
The primary issue in this case revolves around the levy of Central Excise duty on Oleum, which is manufactured by the appellants and claimed to be an intermediate product used in the production of chlorosulphonic acid. The appellants argued that Oleum is not marketable and is intended for captive consumption, thus should not be subject to Central Excise duty. They provided a detailed technical write-up explaining the manufacturing process, emphasizing that it is actually sulphur-trioxide, not Oleum, that participates in the reaction to form chlorosulphonic acid.

2. Classification of Oleum as an intermediate product:
The appellants contended that the product in question is sulphur-trioxide, not Oleum, and thus should not fall under the classification of item 14-G. They argued that Oleum remains in continuous circulation and does not participate in the reaction for the manufacture of chlorosulphonic acid. The Department, however, maintained that the classification was for Oleum and that it should be subject to duty under item 14-G as fuming sulphuric acid.

3. Marketability and recognition of Sulphur trioxide:
The appellants further argued that sulphur-trioxide, in the form it is produced at their unit, is not marketable and is not recognized commercially or technically as an anhydride. They cited the Condensed Chemical Dictionary to support their claim that sulphur-trioxide must be in a solid or liquid form to be considered anhydride. The Department, on the other hand, argued that the product is known as 100% Oleum and is an anhydride form, thus making it excisable under item 14-G.

4. Interpretation of Tariff Item 14-G:
The Tribunal observed that there was confusion regarding the product being charged to duty. The Assistant Collector and the Appellate Collector had different interpretations, with the former focusing on the weight reduction of Oleum after the release of sulphur-trioxide and the latter considering sulphur-trioxide as 100% Oleum and an anhydride form. The Tribunal concluded that sulphur-trioxide is indeed an anhydride of sulphuric acid and should be assessed under item 14-G. They referenced technical literature and previous Tribunal decisions to support this conclusion.

Conclusion:
The Tribunal upheld the levy of duty on sulphur-trioxide under item 14-G, rejecting the appellants' plea. They emphasized that sulphur-trioxide, even in gaseous form, is considered an anhydride of sulphuric acid and thus falls within the scope of item 14-G for the purpose of assessment. The appeal was consequently rejected.